Pennsylvania Casinos Set New Revenue Record In 2016, But Trouble Could Be Brewing

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Contents
1 The top line December numbers
2 A look inside the YTD revenue numbers
2.1 Historical look at casino revenue in Pennsylvania
3 SugarHouse and Parx are the clear winners in 2016
4 A casino-by-casino look at the December numbers
4.1 Sands Bethlehem
4.2 Parx Casino
4.3 SugarHouse Casino
4.4 Rivers Casino
4.5 Harrah’s Philadelphia
4.6 Mohegan Sun at Pocono Downs
4.7 Mount Airy Casino Resort
4.8 Valley Forge Casino Resort
4.9 The Meadows Casino
4.10 Presque Isle Downs and Casino
4.11 Hollywood Casino at Penn National
4.12 Lady Luck Casino Nemacolin Pennsylvania built up strong revenue tallies during the first three quarters of 2016, and following a demoralizing fourth quarter, the state needed virtually every dollar of it. Still, a sharp decline in total gaming revenue in December wasn’t enough to stop Pennsylvania casinos from posting their best year to date, as total casino revenue exceeded $3.21 billion in 2016. The previous record was set last year when the industry tallied $3.17 billion in total casino revenue. Despite setting a new revenue record, a potentially worrisome trend emerged during the last few months of 2016. Slot revenue experienced a pronounced decline, year over year:
October 2016 slot machine revenue: $191,850,596.41 (-3.04%)
November 2016 slot machine revenue: $179,399,603.94 (-4.34%)
December 2016 slot machine revenue: $185,349,872.22 (-6.17%) In addition to slot revenue falling more than six percent in December, Pennsylvania’s 12 casinos also saw table game revenue dip slightly, by about a half a percent for the month. Looking at those figures, it’s not always sunny in Philadelphia, and some state lawmakers may be regretting their decision to punt on passing the gaming reform bill from 2016. That legislation included online gambling, adding slot machines at airports, and changes to Category 3 licenses that would eliminate the restrictive “membership fee.” The legislature is expected to revisit the comprehensive gaming package once again in 2017, but even if it does pass this time around, six months after the fact, the damage has already likely been done. The state would be unlikely to reap the benefits of the additional revenue until 2018. The top line December numbers Only two casinos avoided the slot revenue decline: SugarHouse Casino in Philadelphia and Valley Forge Casino. However, both their gains can best be termed as modest.
SugarHouse Casino: +2.6%
Valley Forge Casino: +2.5% Here’s a look at the industry-wide breakdown of slot revenue and table game revenue in December:
December 2016 slot machine revenue: $185,349,872.22 (-6.17%)
December 2016 table game revenue: $71,878,290 (-0.48%)
December 2016 total gaming revenue: $257,228,162 (-4.64) A look inside the YTD revenue numbers Here is a look at the monthly year-to-date revenue tally for Pennsylvania casinos:
January 2016 GGR -$255,905,078 (+3.6%)
February 2016 GGR – $268,354,231 (+8.6%)
March 2016 GGR – $289,167,505 (+4.2%)
April 2016 GGR – $281,206,497 (+3.9%)
May 2016 GGR – $280,194,999 (+.80%)
June 2016 GGR – $258,423,105 (-0.2%)
July 2016 GGR – $288,451,402 (+2.95%)
August 2016 GGR – $260,904,471 (-4.28%)
September 2016 GGR – $260,937,476 (+2.93%)
October 2016 GGR – $263,011,981 (-0.91%)
November 2016 GGR – $249,637,268 (-1.38%)
December 2016 GGR – $3,213,422,178 (-4.64%) Historical look at casino revenue in Pennsylvania
2006: $31,567,926
2007: $1,039,030,723
2008: $1,615,565,758
2009: $1,964,570,480
2010: $2,486,408,061 (table games introduced)
2011: $3,024,772,959
2012: $3,158,317,863
2013: $3,113,928,591
2014: $3,069,077,597
2015: $3,173,787,012
2016: $3,213,422,178 SugarHouse and Parx are the clear winners in 2016 For the year, Parx, Sands Bethlehem, Meadows, SugarHouse, and Mount Airy all posted slot revenue increases. SugarHouse led the way, with a near four-percent jump in slot revenue from 2015. The casino’s growth (which also extends to table games) was spurred on in large part because of the $100 million expansion project it completed in early 2016. Parx was the second biggest gainer in the slot revenue column, at just under three percent. On the table game front, it was Sands, Parx, SugarHouse, Valley Forge, Presque Isle and Meadows that bettered their 2015 hauls. Once again, SugarHouse was the leader in the clubhouse, with an almost absurd 23-percent YoY increase. Parx was once again the runner-up, despite a solid 12-percent increase in table game revenue. A casino-by-casino look at the December numbers Sands Bethlehem
Slot revenue, December 2016: $24,878,465.50 (-0.87%)
Table game revenue, December 2016: $19,010,584 (-4.23%) With both slot revenue and table game revenue down in December, Sands Bethlehem lost even more ground to its chief rival, Parx. Fortunately for Sands, the damage was mitigated by Parx seeing revenue drop on both fronts as well, just not as steeply. Parx Casino
Slot revenue, December 2016: $32,491,477.87 (-1.45%)
Table game revenue, December 2016: $13,087,664 (-1.7%) Parx missed an opportunity to put some daylight between itself and Sands. But the casino has to feel good about its current position in the market and future outlook, considering it was the top-grossing casino for most of the year. SugarHouse Casino
Slot revenue, December 2016: $14,136,034.00 (+2.6%)
Table game revenue, December 2016: $10,165,490 (+17.59%) SugarHouse continues to buck industry trends. Even during a down month, table game revenue and slot handle soared at the Philadelphia casino. Considering the gains SugarHouse has made since completing its expansion project, I suspect other casinos are starting to look at their own reinvestment plans. Rivers Casino
Slot revenue, December 2016: $21,793,193.38 (-6.14%)
Table game revenue, December 2016: $6,162,798 (+2.33%) Like most of the casinos in Pennsylvania, Rivers Casino suffered through a really tough month on the slot floor. It did see a small uptick in table game revenue. Harrah’s Philadelphia
Slot revenue, December 2016: $15,888,020.02 (-14.71%)
Table game revenue, December 2016: $5,691,000 (-16.53%) It was yet another rough month for Harrah’s Philadelphia as the casino saw both slot and table game revenue go through double-digit declines. Mohegan Sun at Pocono Downs
Slot revenue, December 2016: $16,236,316.35 (-12.03%)
Table game revenue, December 2016: $3,948,244 (-7.62%) Mohegan Sun at Pocono Downs was one of four casinos that saw slot revenue drop by more than 10 percent year-over-year. Mount Airy Casino Resort
Slot revenue, December 2016: $9,891,824.73 (-11.02%)
Table game revenue, December 2016: $3,611,371 (-5.59%) Mount Airy saw sharp declines in slot revenue and table game revenue in December. Valley Forge Casino Resort
Slot revenue, December 2016: $6,533,471.73 (+2.48%)
Table game revenue, December 2016: $2,745,041 (+17.39%) Valley Forge had a very good December, particularly considering how the whole industry performed. For the year, Valley Forge should be content, as slot revenue was fairly static and table game revenue was up more than six percent. The casino would greatly benefit from the Category 3 license changes the state is considering, which could set it up for a strong 2017. The Meadows Casino
Slot revenue, December 2016: $17,218,203.13 (-9.73%)
Table game revenue, December 2016: $2,958,673 (+14.21%) For the second consecutive month, Meadows has seen table game revenue rise significantly. What makes this a bit of an aberration is Meadows, which is not known for table games, is doing this while the industry as a whole experiences revenue declines. Of course, the nearly ten-percent drop in slot revenue made December a bad month for Meadows. Presque Isle Downs and Casino
Slot revenue, December 2016: $7,485,692.63 (-20.88%)
Table game revenue, December 2016: $1,010,490 (-10.77%) December 2016 will go down as one of the worst months in Presque Isle’s history. The good news was table game revenue was down just 10 percent. The horrible news was slot revenue was more than 20 percent off last December’s pace. Hollywood Casino at Penn National
Slot revenue, December 2016: $16,751,442.79 (-3%)
Table game revenue, December 2016: $3,235,782 (+7.25%) With slot revenue down three percent and table game revenue up (for the second consecutive month) by more than seven percent, it was a pretty steady month for Hollywood Casino. Lady Luck Casino Nemacolin
Slot revenue, December 2016: $2,045,730.09 (-2.63%)
Table game revenue, December 2016: $251,154 (-36.52%) The state’s smallest casino in terms of revenue, Lady Luck followed up a 25-percent drop in table game revenue in November with a 36-percent drop in December.

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